Different points along a downward-sloping demand curve come from
A. tangencies between indifference curves and budget lines that represent different prices of the good.
B. tangencies between indifference curves and budget lines that represent different income levels.
C. different points along any one budget line when the prices of the goods are held constant.
D. different points along any one indifference curve when the prices of the goods are held constant.
Answer: A
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A good deal of iron ore is mined in Michigan's Upper Peninsula. What is the relationship between the demand for iron ore and the cost of mining operations in Michigan?
A) Changes in the demand for iron ore are caused directly by changes in the cost of iron mining. B) Changes in the costs of iron mining are caused by changes in the demand for iron ore. C) There is no significant relationship because the demand for iron ore is determined by many different people, while the cost of mining the ore is determined by business executives. D) Nobody knows.
According to the text, in the absence of uncertainty, no one can obtain a profit from the exclusive ownership of a scarce resource, such as a patent or a franchise, because
A) demand curves will be perfectly elastic. B) marginal cost will equal marginal revenue. C) profit requires active production rather than static ownership. D) the cost of retaining ownership will rise to eliminate any profit. E) the tax on capital gains will eliminate any profit.